# GUIDE FOR BASIC ACCOUNTING AND REPORTING

**ACCOUNTING FOR PARTIAL CANCELLATION – NO-YEAR TAFS WITH “DEFINITE” AUTHORITY**

**PREPARED BY:**

# UNITED STATES STANDARD GENERAL LEDGER ADVISORY DIVISION

# GOVERNMENT WIDE ACCOUNTING

**BUREAU OF THE FISCAL SERVICE**

**U.S. DEPARTMENT OF THE TREASURY**

**Note:**This scenario uses T/L S2 15-01 June 2015, Revised by Bulletin No. 2015 -10 (Part 2).

**Accounting For Partial Cancellation – No-Year TAFS with “Definite”**

**Authority**

	3 of 45	IRC Handout 12/3/15

**Background**

This scenario illustrates the partial cancellation in a single TAFS with two programs, with delivered and un-delivered orders for a No-Year appropriation with “definite authority”.  It includes USSGL accounts 809100, “Partial or Early Cancellation of Authority”, and 809200, “Offset for Partial or Early Cancellation of Authority”. 

"*Legitimately incurred obligations that have not been disbursed (i.e. paid) at the time a TAFS is canceled cannot be disbursed from the canceled obligated or unobligated balances of the canceled TAFS”.*

*“After a TAFS is canceled, any obligations or adjustments to obligations that would have been properly chargeable to that TAFS may be disbursed from an unexpired TAFS that is available for obligation for the same purpose as the closed TAFS...." OMB Circular No. A-11, Section 130.14, dated July 2010. (See cite for specific provisions)*

Per TFM Volume I Bulletin No. 2015-07 “Yearend Closing”, “If an agency must liquidate obligations after an account has been closed, it may use up to one percent of its current appropriation by reporting an SOT for the current TAFS using the BETC code DISBCA [formerly subclass (46)].  OMB provides guidance in OMB Circular No. A-11, Section 130.14, on liquidating obligations after an account has been closed.  Agencies deposit collections received after an account has been closed in miscellaneous receipts account 3200, “Collections of Receivables From Canceled Accounts”.

**Proposed Changes**:

**Account Title:**           	      Partial or Early Cancellation of Authority With a U.S. Treasury 

                                          Warrant 

**Proposed Account Title**: Partial or Early Cancellation of Authority 

**Account Number:**          435100 

**Normal Balance:**             Credit 

**Definition:**  The amount of annual, multi-year, or no-year appropriation authority that is canceled early by administrative action in a definite account or by early cancellation of the entire appropriation. 

**Justification:**  This activity will no longer be accomplished with a U.S. Treasury Warrant. This activity will flow through the Year End Module in ATM.  The transaction in ATM will generate a year end BETC.  The ***proposed*** year end BETC is SWYEP Surplus Warrant Year End Partial. 

## Listing of USSGL Accounts Used in This Scenario

*For Account Definitions please refer to the USSGL TFM Section II.

**Note:**  A beginning trial balance is not applicable in this scenario.

## Illustrative Transactions

Year 1

1. To record a current year appropriation (Program A $7,000, Program B $1,000).

2. To record budgetary authority apportioned by the Office of Management and Budget and available for allotment.

3. To record the allotment of authority.

Or should we revise A104 to reflect the warrant receivable? If yes, see Appendix A.

4.  To record current year undelivered orders without an advance (Program A and B).

5. To record the delivery of goods and services and to accrue a liability (Program A).

6. To record appropriations used (Program A).

7. To record the partial payment of the account payable on a confirmed disbursement schedule (Program A).

## Pre-Closing Adjusted Trial Balance – Year 1

**Closing Entries – Year 1**

C1. To record the consolidation of actual net-funded resources and reductions for withdrawn funds.

C2. To close paid delivered orders to actual resources.

C3. To close revenue, and expense and other financing source accounts to cumulative results of operations.

C4. To record closing of fiscal-year activity to unexpended appropriations.

## 

## Post-Closing Trial Balance – Year 1

**External Reports – Year 1**

****

**Illustrative Transactions – Year 2**

1. To record a current year appropriation (Program A $1,000 Program B 6,000).

2. To record budgetary authority apportioned by the Office of Management and Budget and available for allotment.

3. To record the allotment of authority.

4. To record current year undelivered orders unpaid without an advance (Program B).

Part of the budgetary resources (Program A) is canceled and the funds are withdrawn. The following entries illustrate the necessary transactions.

5. To record the cancellation of a valid obligation and account payable in the “canceling appropriation”. Depending on the obligating document, the Federal government may still be obligated to pay this account upon receipt of a valid bill. The scenario assumes there is a liability.  (Program A).

6. To reverse appropriations used (Program A).

7. To record a downward adjustment to unpaid prior-year undelivered orders (Program A).

8. To record the cancellation of authority not previously expired and to withdraw funds (Program A).  If the partial cancellation is in a no-year appropriation with the Definite Flag attribute, it will flow through the Year End Module in ATM. The transaction in ATM will generate a year end BETC. The proposed year end BETC is SWYEP Surplus Warrant Year End Partial.

9.  To reinstate “canceled payable” in canceled program. OMB Circular No. A-11 (2015) requires agencies to maintain proper general ledger control for obligations to prevent both overpayment and over-obligation related to canceled appropriations. Note that “Antideficiency Act provisions continue to apply to canceled TAFSs”.

## Pre-Closing Adjusted Trial Balance – Year 2

**Closing Entries – Year 2**

C1. To record the consolidation of actual net-funded resources and reductions for withdrawn funds.

C2. To record the closing of downward adjustments and transfers to undelivered orders – obligations, unpaid.

C3. To record the closing of downward adjustments and transfers to delivered orders – obligations, unpaid.

C4. To close revenue, expense and other financing source accounts to cumulative results of operations.

C5. To record closing of fiscal-year activity to unexpended appropriations.

C6. To record the closing of canceled authority for partial cancellations.

C7. To reclassify Canceled Authority, for partial cancellations only, to memorandum accounts. 

## 

## Post-Closing Trial Balance – Year 2

**External Reports – Year 2**

****

**Illustrative Transactions – Year 3**

1.  To record a current year appropriation (Program A 8,000, Program B 0).

2.  To record budgetary authority apportioned by the Office of Management and Budget and available for allotment.

3.  To record the allotment of authority.

4.To record current year undelivered orders unpaid without an advance (Program A).

5-6. The agency prepares to pay the outstanding payable in Program A from previous year. Remove the “canceled payable” from Program A and re-establish the account payable in the current year. Reduce the canceled authority in Program A. OMB Circular No. A-11 (Section 130.14) limits payments of obligations against canceled TAFSs from unexpired TAFSs are limited to 1% of the appropriation in the unexpired TAFS. In this example, the 1% limit is reached by paying this single obligation.

5.  To record an obligation and accounts payable in an unexpired appropriation for a valid bill related to a canceled appropriation.

MC Notes, we cannot use D145 because the amount that was cancelled is now in the memo account 809100. We cannot add proprietary to E204 since the Memo TC only includes Memo USSGL accounts. We will need to add a new TC for 2960/6800 with an also post to E204. We may want to illustrate 3 differently see Appendix B.

6.  To reestablish obligation and reduce Memorandum account 809100 in Program A.

MC Notes, we cannot use D145 because the amount that was cancelled is now in the memo account 809100. We cannot add proprietary to E204 since the Memo TC only includes Memo USSGL accounts. We will need to add a new TC for 2960/6800 with an also post to E204. We may want to illustrate 3 differently see Appendix B.

7.  To record appropriations used.

MC Notes, we cannot use D145 because the amount that was cancelled is now in the memo account 809100. We cannot add proprietary to E204 since the Memo TC only includes Memo USSGL accounts. We will need to add a new TC for 2960/6800 with an also post to E204. We may want to illustrate 3 differently see Appendix B.

8.  To reduce Memorandum account 809100 in Program A.

MC Notes, we cannot use D145 because the amount that was cancelled is now in the memo account 809100. We cannot add proprietary to E204 since the Memo TC only includes Memo USSGL accounts. We will need to add a new TC for 2960/6800 with an also post to E204. We may want to illustrate 3 differently see Appendix B.

9.  To record the payment of the account payable on a confirmed disbursement schedule (Program A).

## Pre-Closing Adjusted Trial Balance – Year 3

**Closing Entries – Year 3**

C1. To record the consolidation of actual net-funded resources and reductions for withdrawn funds.

C2. To record the closing of paid delivered orders to total actual resources.

C3. To close revenue, expense and other financing source accounts to cumulative results of operations.

C4. To record closing of fiscal-year activity to unexpended appropriations.

## Post-Closing Trial Balance – Year 3

**External Reports – Year 3**

****

**Appendix A:**

**Account Title:**        Fund Balance With Treasury Under a Continuing Resolution 

**Proposed Account Title: Fund Balance With Treasury While Awaiting a Warrant**

**Account Number:**    109000 

**Normal Balance:**    Debit 

Definition: The amount equal to the funding provided under a continuing resolution and apportioned in accordance with Office of Management and Budget's automatic apportionment bulletin. Pursuant to a continuing resolution or enacted annual appropriation act, the account may be used while awaiting a warrant to be issued for an appropriation by the U. S. Department of the Treasury's Bureau of the Fiscal Service. The balance in this account will adjust to zero when the U.S. Department of the Treasury's Bureau of Fiscal Service issues a warrant and must adjust to zero by yearend. This account does not close at yearend.

**Justification**: Update the title to distinguish that this account is not only for use when an Agency has a Continuing Resolution.

A104	 To record the enactment of appropriations.		

 	 Comment: 	If appropriations were anticipated, credit USSGL account 412000. For anticipated appropriations, see USSGL TC-A102. Use USSGL account 462000 for appropriations exempt from apportionment. Debit USSGL account 109000, while awaiting a warrant to be issued for an appropriation by the U. S. Department of the Treasury's Bureau of the Fiscal Service. This transaction is not recorded by special or non-revolving trust funds unless amounts are appropriated from the General Fund of the Treasury via Treasury Appropriation Warrant.

**Budgetary Entry**

Debit   411100   Debt Liquidation Appropriations		

Debit   411200   Liquidation of Deficiency - Appropriations		

Debit   411500	 Loan Subsidy Appropriation		

Debit   411600	 Debt Forgiveness Appropriation		

Debit   411700	 Loan Administrative Expense Appropriation		

Debit   411800	 Reestimated Loan Subsidy Appropriation		

Debit   411900	 Other Appropriations Realized		

   Credit	   412000   Anticipated Indefinite Appropriations 		

   Credit	   445000   Unapportioned Authority		

   Credit	   462000   Unobligated Funds Exempt From Apportionment		

**Proprietary Entry**

Debit   101000   Fund Balance With Treasury

Debit   109000   Fund Balance with Treasury While Awaiting for a Warrant

   Credit	  310100   Unexpended Appropriations - Appropriations Received		

**Appendix B:**

3A. To reestablish the obligation.

3B.  To reduce the canceled authority in Program A.

**For reference D145:**

D145  To record in the canceled appropriation the removal of the canceled payable upon receipt of a valid bill. The budgetary entry reduces the balance of authority that remained upon cancellation.

Comment:      Simultaneously post USSGL TC-B412 in an unexpired appropriation that is available for the same purpose as the closed account. See Office of Management and Budget Circular No. A-11 for additional guidance.

Reference:            USSGL implementation guidance; Canceled Payables

**Budgetary Entry**

Debit   435000   Canceled Authority

   Credit   420800   Adjustment to Total Resources - Disposition of Canceled Payables

**Proprietary Entry**

Debit   296000   Accounts Payable From Canceled Appropriations 

   Credit   680000   Future Funded Expenses